EAGA calls to improve communications systems

EAGA calls to improve communications systems

By Benget Simbolon Tnb.

MANADO, North Sulawesi (JP): A seminar on investment
opportunities in eastern Indonesia under the East ASEAN Growth
Area (EAGA) concluded here over the weekend with a call to
improve telecommunications and transportation systems in the
area.

"The infrastructure to link the key centers in the growth area
is very urgent if we are to facilitate faster flow of information
among businessmen and the media in the subregion," Permanent
Secretary of the Confederation of ASEAN Journalists (CAJ) Abdul
Razak said, while reading from the joint statement issued by the
seminar.

The three-day seminar, organized by the CAJ, was attended by
about 100 journalists from ASEAN countries and was addressed by
11 government officials, including two ministers, and two private
sector businessmen from Indonesia and the Philippines.

Speakers at the seminar urged the four governments involved in
the EAGA cooperation -- Brunei, Indonesia, Malaysia and the
Philippines -- to link the key centers in the ASEAN's subregion
with better direct telecommunications and transportation.

Currently, people in Davao, for example, cannot make direct
calls to Manado and the flight service between the two important
cities in the subregion is only twice a week.

The seminar proposed cooperation among the EAGA's business
councils and the establishment of a business center to intensify
the campaign on the development of the subregion as a place to
invest and trade.

The seminar also urged the subregion's working committee on
trade to hasten the harmonization of export and import procedures
in the area with a view to accelerating trade.

Herman Haeruman, the deputy chairman for regional development
of the National Development Planning Agency (Bappenas), noted at
the seminar that to make the economy in the eastern Indonesia
grow at 7.1 percent annually, in line with that of the
government's target for national economic growth, the country's
eastern provinces will require a total investment of around Rp
200 trillion (US$86.6 billion) during the current Sixth Five Year
Development Plan.

"To meet the investment needs, private sector investment is
crucial. The private sector must take a leading role in the
development of the area. We cannot rely only on government
spending to improve infrastructures there," he said.

He added that government policy should be designed in such a
way as to enhance private sector investments.

Constraints

He identified a number of development constraints in eastern
Indonesia, including the low capacity of human resources, lack of
economic infrastructure, the distance from economic development
centers and geographic barriers, such as unstable land and rugged
mountains.

Some provinces in the area defined as the "eastern Indonesia
region", such as South, West and East Kalimantan and North and
South Sulawesi have enough infrastructure compared to the eight
other provinces that are involved in the EAGA subregional
cooperation.

"Challenges to increase private investment in eastern
Indonesia should not be only answered by public spending for
infrastructure, but also by other means, such as the availability
of quality manpower, simple and consistent bureaucratic systems,
quality urban services and availability of reliable information,"
he said.

Asril Noer, an expert assistant to the investment minister,
noted that to speed up development in eastern Indonesia, the
government has already established one integrated economic
development area (locally known as Kapet) in each province in the
region.

"Every integrated area will be developed by the central
government and the provincial administration with the
participation of the private sector," Asril said.

He said that in July the Indonesian government issued a
government regulation allowing certain industries to get tax
facilities.

The new regulation stipulates that income tax on newly-
established firms in certain industries can be borne by the
government for 10 years in the western part of the country and
for 12 years in the eastern part.

In addition to the incentives, the government has also
provided special incentives for investors in eastern Indonesia,
including the acceleration of depreciation and amortization, the
carry-over of losses up to 10 consecutive years, 50 percent
reduction of taxes on land and buildings and the employment of
expatriates if needed.